One of the major issues business owners have been facing during the COVID-19 crisis is the payment of rent. Tenants who have are facing drastic reductions in their businesses, or who have had to close to the public altogether, are facing an inability to make rental payments, while landlords are struggling to cover their own expenses without their usual rent revenue.


The federal government, in collaboration with the provincial and territorial governments, recently announced the Canadian Emergency Commercial Rent Assistance (CECRA) program to help landlords and tenants.


The program is intended to lower rents by 75% for qualifying small businesses. In order to qualify, a tenant must be paying less than $50,000 per month in rent and must have either temporarily ceased operations due to the pandemic or experienced a drop of at least 70% in revenues. Landlords will be provided with loans to cover 50% of rent payments during the months of April, May and June.


The loans will be forgivable if the landlord agree to reduce the tenant’s rent by at least 75%. The landlord is also required to provide the tenant with a rent forgiveness agreement which includes a term not to evict the tenant while the agreement is in place. The tenant would cover the balance of the usual rent payment. As a result, the landlord covers 25% of the rent, the tenant covers 25%, and the federal and provincial government would share the remaining 50%.


CECRA is expected to be in place in mid-May. Landlords will be able to implement the program retroactively for April and May.


The federal government is expected to announce further rent relief measures for larger tenants who do not meet the eligibility requirements. We will continue to update this page as more details of CECRA are announced.


Please do not hesitate to contact your relationship partner or lawyer if you have any questions or if we can be of assistance in guiding you through these new challenges.


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This article represents general information and is not legal advice. Please contact us if you would like legal advice that is tailored to your particular circumstances. We would be happy to help.